Extensible media format support: With the new Raw AV
pipeline, Silverlight can easily support a wide variety of
third-party codecs. Audio and video can be decoded outside the
runtime and rendered in Silverlight, extending format support
beyond the native codecs.

What the above means is that with Silverlight 3 in addition
to the built-in codecs for VC-1 and H.264 and the built-in
containers (ASF and MOV) developers can plug an arbitrary
audio or video codec and containers into the pipeline to
support other formats like Dirac, vorbis, theora and the OGG
container.

Both the codecs and the container parsers are authored
using C# (or any other .NET supported language).

It would be nice to use Mono.SIMD where appropriate for
these codecs. Mono.SIMD works out of the box on .NET, but it
is hardware accelerated in Mono.

Atsushi at Novell has done some of the work to get an old
C#-based Vorbis codec working with Silverlight 3. We will
post more details when we have more information (the fix is on
SVN).